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If ç Is the Elasticity of Demand,a Profit Maximizer Sets η\eta

Question 29

Multiple Choice

If ç is the elasticity of demand,a profit maximizer sets a markup price of:


A) MC[1/(1 + 1/ η\eta ) ].
B) MC[1/(1 - 1/ η\eta ) ].
C) AC[1/(1 - η\eta ) ].
D) AC[1/(1 - 1/ η\eta ) ].
E) 1/(1 - η\eta ) .

Correct Answer:

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